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An AICPA Small Firm Champion

A former practitioner aims to give small firms a front-row seat at every table at the Institute.

BY ANITA DENNIS

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fter finding out how small firm members
define success , I want to learn how the AICPA
can help them achieve it,” James C. Metzler, CPA, said
in August 2003 when he became the AICPA’s first
vice-president of small firm interests. In the months
since then, Metzler has used his entrepreneurial
preneurial experience to devise a strategy for creating
AICPA programs and services tailored to this
constituency’s needs.

A FOUR-PRONGED APPROACH Listen to and learn from members.
Metzler plans to get as much information
as possible from small firm practitioners—whom he
thinks of as his “customers”—before he tries to
address their concerns. To that end he set out on a
still-in-progress “listening tour” two days after
taking on his new job. Metzler says the tour will
continue indefinitely. “By visiting members where they
live and practice,” he says, “we at the AICPA are able
to stay in close touch with their needs and wishes.”
His itinerary includes visits to retreats, chapter
meetings, state society forums and conferences to get
a sense of what will enhance success for small firm
members and how they believe the Institute can help
them meet their needs. He has been to two to three
cities a week since he started on August 1, 2003.

Although he set out with an open mind, Metzler
anticipated that marketing and sales would be critical
issues for smaller firms. “In a small practice, you
not only have to sell and perform engagements, but you
also have to continue bringing in new clients,” he
says. “And because of their size and the demands on
their time, small firms are very vulnerable when they
lose clients.” At the same time, as clients’
businesses grow and become more sophisticated, their
CPA firms have to keep pace, which adds challenges.
“Losing clients can devastate small firms. So I want
to find ways to help them prevent that and deal with
it if it happens,” he says.

Metzler notes that
when firms don’t have all the resources they need to
serve a growing client, one good solution is to team
up with another practice that offers different skills
and expertise. As a result, two or more small firms
can offer one client the full-service options normally
available only from a large firm. “I am seeing a
rapidly growing trend in which smaller firms ally with
other CPA firms to jointly serve clients,” he says.
“This enables them to stay with clients who seek a
wider array of services as their businesses grow.
Clients like it because they can retain the longtime
trusted adviser who helped them through their early
years.”

Metzler suggests that the AICPA could
find a way to facilitate this process, becoming a
matchmaker of sorts for partnerships between firms. “I
hope to create resources, tools and guidance that will
help CPA firms develop and succeed through key
alliances with other firms,” he says.

Work within the Institute to guarantee it
understands and addresses small firm members’
needs. “I want small firms to have a
front-row seat at every table at the Institute,”
Metzler says. In addition, he is investigating
communications options to ensure members are aware of
Institute resources already available to them, such as
Partnering for CPA Practice Success—the AICPA Alliance
for CPA Firms—and other member sections.

Track political and legislative developments
that could affect small firm members
and coordinate ways to address them with
the AICPA’s Washington, D.C., office. For example,
Metzler plans to forge new relationships with
government agencies in Washington—such as the Small
Business Administration—that have an enormous impact
on small businesses.

Get feedback from the businesses small firms
serve. “To deliver value our members
first must understand what that word means to their
clients,” he says. Metzler will be arranging forums
with business owners around the country to better
understand what real value from their CPA firm means
to them.

Based on his own experience, Metzler
believes small firm clients are seeking assurance that
their CPA provides accurate and reliable financial
information and that they’re taking advantage of all
suitable, legitimate tax strategies. And, he says,
each client wants a trusted adviser, business partner,
confidant, quarterback and mentor. In his view these
clients most often will turn to their CPAs as the
trusted adviser to play those roles in situations such
as these:

When making complex financing decisions,
such as when a business is sorting through financing
arrangements and securing crucial relationships with
banks.

In a crisis—whether it be financial
troubles, the unexpected death or loss of a key member
of the organization, cash-flow problems or dealing
with complex regulations.

During an expansion, to help consider
financing or tax incentives and issues related to
buying or merging with a company.

When facing succession-planning issues,
such as preparing the next generation of owners,
estate planning, making insurance decisions and
constructing a will that considers family equity
concerns.

To address wealth-building concerns and
keeping the business, its assets and its ownership in
the family. And on the sale of the business, to help
with issues such as creating an exit strategy and
getting a proper valuation.

When seeking to improve internal
reporting so that critical business decisions will
have positive results.

To tackle product-costing issues to
improve sales prices and quoting.

For help with business processes and
taking advantage of technology improvements.

SMALL FIRM BACKGROUND Metzler
got his start at a firm that is now known as Gaines,
Metzler, Kriner and Co. in Buffalo, New York, where he
worked with closely held family businesses on tax,
accounting and financing issues. There were 5 people
in the firm when Metzler started there in 1970, and 45
when he left the firm two years ago, along with
another 25 in its technology subsidiary.

Metzler’s clients were mainly in manufacturing and
distribution. They ranged from businesses in their
second and third generation of family ownership to
start-ups. While his largest client was a manufacturer
with about $85 million in annual sales, the majority
had sales of $1 million to $10 million.

In
addition to providing clients with a variety of
traditional services, Metzler also had a keen interest
in marketing and sales and aimed to help them in these
areas. He had grown up helping out at his father’s
Western Auto Store franchise, where he repaired cars
and sold auto parts. “I learned how to ask the right
questions so I could identify people’s needs,” he
remembers, and he later used that skill in his
accounting practice.

As Metzler recalls,
customers came to the store for two reasons. The first
was that they had a problem with their car and didn’t
know what to do about it. “So my dad taught me how to
ask questions that would reveal the real problem and
enable me to sell them the correct parts. He didn’t
look kindly on me if a customer had to return a part
because it was the wrong one. Thus, I became pretty
good at asking the right questions and listening
well.”

This experience provided an excellent
foundation for Metzler’s accounting career. “It was
natural for me to listen carefully to clients and
inquire about their businesses to determine what it
would take to resolve their problems. This background
helped me immensely when I wanted to close deals with
prospective clients or gain new engagements from
existing ones.”

The second reason customers
came to the family’s auto store was to improve their
car’s efficiency—for example, by getting better gas
mileage. Metzler says his father was committed to
helping customers enhance their cars’ performance, so
it was natural to adapt this approach to his
accounting career. “I always was enthusiastic about
improving a client’s business or financial position on
an ongoing basis. Both my auto-parts customers and my
accounting practice clients perceived me as delivering
great value when I helped them improve their cars or
their businesses in ways they hadn’t thought of.”

At the age of 28, Metzler became a partner in the
CPA firm and throughout his career there he took on
many leadership roles in areas such as marketing,
information technology and community involvement.
After 32 years with the firm, he left to cofound
ConvergenceCoaching LLC—a CPA firm coaching practice
in which he worked until joining the Institute.
Metzler also has a long history of volunteering within
the profession. He has served on many AICPA
committees, is a past president of the Buffalo chapter
of the New York State Society and has spoken in public
forums on technology and practice management issues.
Many practitioners know him because he spent more than
10 years speaking at conferences throughout the
country on practice management and niche development
issues. In addition, he is the author of the book
How to Build a Million Dollar Technology
Consulting Practice, has participated in AICPA
video courses and is often quoted in professional
publications.

THE IMPACT OF SARBANES-OXLEY
Although accounting reform has caused
tremendous changes in the corporate environment, in
Metzler’s opinion, small clients at least are not
terribly concerned about how they will operate in the
wake of the Sarbanes-Oxley Act of 2002. “In terms of
regulation,” he says, “they’re far more worried about
issues such as Occupational Safety and Health
Administration regulations, labor laws, environmental
issues, liability insurance rates and coverage,
foreign competition, health insurance rates, unions,
customer pressure for lower prices and the negative
effect these forces have on the bottom line.”

Small CPA firms may face a very real challenge
after Sarbanes-Oxley because of the fee resistance
from small business clients who will have to comply
with potential regulations and disclosures they don’t
perceive as legitimately applicable to them, Metzler
says. “In these cases small firm practitioners fear
they will have to absorb all the additional costs of
compliance clients are unwilling to pay for.”

But there’s good news, too. “There are many
opportunities for small firms to perform myriad
nonaudit services for public companies—especially the
smaller public companies in cities throughout
America—after Sarbanes-Oxley,” he says. These services
include outsourced accounting and bookkeeping, due
diligence, valuations, forecasts, internal auditing,
advice on complying with section 404 on internal
controls, providing audit committee guidance and
membership, and technology and other special projects.

In
addition, there are initiatives under way at the
AICPA that address ongoing issues, Metzler
notes. The Institute’s task force for
differential accounting standards has opened the
debate on the appropriateness of private company
accounting standards. At the same time, the
auditing standards board has been restructured
to better reflect the needs of the private
business sector.

Encouraging
Feedback Metzler urges
members to send him their questions and
concerns. He can be contacted by phone
at 212-596-6039 or via e-mail at
jmetzler@aicpa.org . Members can
write him at the AICPA, Harborside
Financial Center, 201 Plaza Three,
Jersey City, NJ 07311-3881.

A GOOD TIME FOR SMALL FIRMS
Metzler is very enthusiastic about the
prospects for these members. “There has never been a
better time for small CPA firms,” he says, adding that
small practices can work with larger accounting firms
to perform some of the nonaudit services mentioned
above.

In the end Metzler believes the bond
between small firms and their clients will be of
paramount importance. “The enormous strength of the
relationship between a small firm practitioner and his
or her small business clients is second to none,” he
says. “Today there’s a renewed focus on the importance
of small, family and privately held businesses
throughout the profession and across America.” For
example, he notes that IBM has refocused its efforts
on the small and medium business markets. “These types
of clients are the heart and soul of smaller firms.”

ANITA DENNIS is a journalist who specializes in
business topics and is a former JofA managing
editor.

RESOURCE S

Web site
Information about Partnering for
CPA Practice Success—the AICPA Alliance for CPA
Firms—is available at www.pcps.org .

Audit Risk Alerts. These
publications provide “how-to” advice for
handling almost every type of financial
statements. They help CPAs identify for specific
industries the significant business risks that
could result in material misstatements.

Checklists and Illustrative
Financial Statements. This series is for CPAs
who are auditing financial statements or
preparing them for companies operating in
specific industries. The checklists help
practitioners make sure they are accurately
and effectively obtaining or reviewing the
appropriate materials.

Consulting Services Practice
Aids. These publications help CPAs apply their
knowledge of organizational functions and
technical disciplines in the course of
providing consulting services—for example,
business valuation and litigation services.

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